HomeMy WebLinkAbout20240612 - Sustainability Advisory Board - Green Power Program - UpdateGreen Power Program Overview
Design and Implementation
June 12, 2024
Today's Presentation
•Where we've been
•Guiding principles
•Program design
•Program process
•Key commitments and financial impacts
•Impact of approving the Lead Community Agreement
What Is A Green Power Program?
An option for
customers of
regulated utilities to
buy power from
newly developed
renewable energy
sources through a
special rate (“tariff”)
on their utility bills.
Guiding Principles
1.Develops new, utility-scale renewable energy in Montana
2.Program rates, contract terms, and eligibility requirements
are as accessible and attractive to as many customers as
possible
3.Program does not negatively impact non-participating
customers
Where We Are Now
Dec. 2019
Provisional
goal of
100% clean
electricity
Dec. 2019
PSC directs
NEW to
explore
green tariff
Dec. 2020
100% clean
electricity
adopted under
Bozeman
Climate Plan
Feb. 2021
Interlocal
between
Missoula
County, Cities
of Missoula,
Bozeman,
Helena
June 2020
Missoula MOU
with
NorthWestern
Energy signed
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
Green Power Program
Design
GP1: New, utility-scale renewable energy
•New solar or wind resource, potentially paired with storage,
located in Montana.
•Size will be capped at 50 MW for the initial phase of the
program.
GP2: Accessible and attractive
•Contract terms and eligibility
•All local government, commercial, and industrial
NorthWestern Energy electricity customers may
participate for the depreciable life of the project
•Residents in participating jurisdictions will have the ability
to opt-in for short term subscriptions
•Participation is completely voluntary
GP2: Accessible and attractive
•Program rates
(Fixed costs) – (Floating credit) = Subscription rate
•Fixed costs = Capital, interconnection, operations and
maintenance, incremental ancillary services, revenue
requirement, and administration.
•Floating credit = Market value of the electricity
produced, capacity credit, and tax credits.
•Early modeling indicates a modest premium with the
potential for a bill credit.
•The Western Energy Imbalance Market
(WEIM) is a real-time energy market that
generates cost savings for its participants
and enhances grid reliability
•Since 2014, the WEIM has grown to
include 11 states
•NorthWestern has participated in the
WEIM since June 2021
•The energy credit for the Green Power
Program will be based on EIM market
prices, or its successor
Energy Market
GP3: No impact to non-participants
•Cost of the project will be incorporated into the
subscription rate.
•The program design ensures that the program costs are
fully recouped from program subscribers.
Additional Program Details
•We have established a process for program implementation,
including PSC approval, commercial and industrial recruitment,
and RFP issuance.
•The program is designed with the opportunity to participate
through the depreciable life of the project, with the option to
extend.
•We have agreed that the Communities will be the lead
marketers of the program.
•We have agreed with NorthWestern to collaborate on future
projects.
•The program will ensure retirement of renewable energy
credits (RECs) on behalf of participants.
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
July 2024
Lead
Community
Agreement
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
July 2024
Lead
Community
Agreement
July 2024
Joint Tariff
filing to PSC
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
2024
Notices of
Interest
submitted
after PSC
approval
July 2024
Lead
Community
Agreement
July 2024
Joint Tariff
filing to PSC
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
July 2024
Joint Tariff
filing to PSC
2025
RFP Process
July 2024
Lead
Community
Agreement
2024
Notices of
Interest
submitted
after PSC
approval
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
July 2024
Joint Tariff
filing to PSC
2025
RFP Process
July 2024
Lead
Community
Agreement
2024
Notices of
Interest
submitted
after PSC
approval
2025
Subscription
Agreements
submitted
Where We Are Going
Nov./Dec.
2023
Green Power
Program Term
Sheet adopted
July 2024
Joint Tariff
filing to PSC
2025
RFP Process
July 2024
Lead
Community
Agreement
2024
Notices of
Interest
submitted
after PSC
approval
2025
Subscription
Agreements
submitted
2025
Compliance
filing with
PSC
Form Binding to the
Communities?
Financial
Impact?
Focus of Further
Discussion
Term Sheet
framework of program design
No No None
Lead Community Agreement
roles & responsibilities
RFP design & issuance process
Yes
(To file with PSC
& RFP cost)
Yes
(RFP cost)
Language in RFP
process
Tariff
commission approved program design
Yes
(After subscription
agreement and
PSC approval)
Yes
(Legal services)
Fine tuning language
Billing administration
Notice of Interest
non-binding load information to inform RFP
No No None
Subscription Agreements
binding subscription for the useful life of the
project
Yes
(to subscribe)
Yes
(new subscription rate)
Fine tuning language
•FAQ
•Is the 50 MW cap sufficient?
•Why are the communities responsible for the RFP obligations?
•Is the contract duration too long?
•What will happen to market prices over time?
•Why pay a premium for renewable energy?
•Comments received and addressed
•Define schedules for ancillary services
•Include exit or transferability provisions
•Include an option for energy storage
Community Feedback
What Does This Mean?
•Approval of Lead Community Agreement is the next step of program execution
•It is a binding commitment for moving through the program implementation process and sets roles and responsibilities for all parties. Next steps are:
•Tariff Filing
•Collect Notices of Interest
•Issue an RFP and identify top scoring bids
•Collect Subscription Agreements
•Select bid for the program and execute compliance filing at PSC
•Key strategy to reach 100% clean electricity